Tweedy Browne

Tweedy Browne

Last Update: 05-12-2016
Related: Tweedy Browne Global Value

Number of Stocks: 50
Number of New Stocks: 2

Total Value: $3,632 Mil
Q/Q Turnover: 6%

Countries: USA
Details: Top Buys | Top Sales | Top Holdings  Embed:

Tweedy Browne Watch

  • Chuck Royce's Largest 2nd-Quarter Trades

    Chuck Royce (Trades, Portfolio), portfolio manager for Royce Pennsylvania Mutual Fund since 1972, is one of the pioneers in small-cap investing and enjoys one of the longest tenures of any active mutual fund manager. During the second quarter he traded the following stocks:


    The guru reduced his stake in UniFirst Corp. (UNF) by 21.25% with an impact of -0.26% on the portfolio.

      


  • Tweedy Browne Global Fund Purchases Stake in Cie Generale des Etablissements Michelin

    During the second quarter, The Tweedy Browne (Trades, Portfolio) Global Fund purchased a 760,360-share stake in Cie Generale des Etablissements Michelin SA (XPAR:ML) at an average price of 4.91 euros. The trade had a 1% impact on the Tweedy Browne (Trades, Portfolio) Global Fund portfolio.


    Cie Generale des Etablissements Michelin was formed in 1889. The company manufactures and sells tires for all kinds of vehicles. It has three operating segments: passenger car and light truck tires and related distribution; truck tires and related distribution and specialty businesses.

      


  • Agco: Darling of the Value Community

    Agco (NYSE:AGCO) is a U.S.-based tractor manufacturer that is down with grain prices. Being out of favor, it is a darling of the value investing community. What will probably change that is a year of inclement weather, which will raise grain prices.


    Agco has 82.47 million shares and trades at a market cap of $4 billion. The dividend is 52 cents and dividend yield 1%. Trailing earnings per share are $2.81 and the price-earnings ratio is 17.

      


  • Warren Buffett Is Wrong; Macro Is Important

    Warren Buffett (Trades, Portfolio) is famous for telling investors that he and Charlie Munger (Trades, Portfolio) don’t pay any attention to macroeconomics and that they (other investors) would be well served by ignoring macroeconomics as well.


    There are a few choice Buffett quotes on the subject, such as "Forming macro opinions or listening to the macro or market predictions of others is a waste of time" as well as “I don’t read economic forecasts. I don’t read the funny papers” and “Charlie and I don’t pay attention to macro forecasts. We’ve worked together now for 54 years, and I can’t think of a time when we made a decision on a stock or on a company.” So it’s pretty clear that both Buffett and Munger have a low opinion of the place macroeconomics has in an investment process.

      


  • Tweedy Browne Global Value Fund Makes Trades Around the World

    Since its inception in 1993, the Tweedy Browne (Trades, Portfolio) Global Value Fund invests in foreign stocks that are undervalued based on Ben Graham’s investment approach. While the fund primarily focuses on developed countries outside of the U.S., the managers still consider U.S. stocks as opportunities become attractive. During the second quarter, Tweedy Browne (Trades, Portfolio) Global made 12 trades, three each of new buys, adds, reductions and sellouts.


    The fund bought 12,880,300 shares of BAE Systems Inc. (LSE:BA), which represents 1.25% of the global fund’s portfolio. The aerospace and defense company averaged £4.9 per share during the second quarter. Additionally, Tweedy Browne (Trades, Portfolio) Global bought 760,360 shares of Cie Generale des Etablissements Michelin (XPAR:ML). The global fund dedicated 1% of its portfolio to the French auto company, which averaged €90.23 per share. Tweedy Browne (Trades, Portfolio) Global also bought 486,757 shares of British biotech company Shire PLC (LSE:SHP) at an average price of £42.06.

      


  • 3 Guru-Held British Stocks That May Be Impacted by Brexit

    In just a little over a week, the U.K. will vote on June 23 whether to stay in the European Union, in response to growing calls from the Conservative Party and the U.K. Independence Party, who say it’s been too long since Britons last voted to stay in the union in 1975.


    Bloomberg Monday speculated about what the first 100 days may look like should Brexit happen, predicting chaos and loss of confidence through the rest of the EU. President of the EU Donald Tusk has said Brexit could lead to the end of “western political civilization itself.”

      


  • Tweedy Browne Comments on Standard Chartered Bank

    While our bank stocks as a group were being buffeted by slowing global growth, increasing concern about the Chinese economy and collapsing oil prices, it is our position in Standard Chartered Bank (LSE:STAN) that has to date proven to be the most disappointing. As you know from our prior letters, we first purchased shares in this emerging market dependent bank back in 2013, after it had declined from 18 pounds to approximately 13 pounds per share, a price we felt did not adequately account for its future prospects. As Will Browne has sometimes said, “there is a fine line between being early and being wrong.”


    At the time of purchase, Standard Chartered, in our view, was conservatively financed, traded at a significant discount to our estimates of its intrinsic value, and paid an attractive dividend. That dividend was omitted last November due to mounting capital concerns, loan losses and uncertainty associated with the bank’s oil & gas loan book. As of fiscal year-end, Standard Chartered was priced at roughly 50% of its tangible per share net asset value (book value). If Standard Chartered’s earnings power were to recover to a 10% return on tangible equity (based on today’s book value), it would generate a 20% after-tax earnings yield on the current price. In other words, the current stock price would be 5 times after-tax earnings, if earnings recover to a 10% return on equity. In the past, banks in Asia have been acquired at significant premiums to tangible net asset value and at more than 10 times after-tax earnings. The bank is in the midst of a restructuring with new management, and appears to be taking all the right steps to put it back into a more competitive and more profitable position. That said, the near-term headwinds are significant. We continue to monitor the position carefully, and have eliminated it from our Worldwide High Dividend Yield Value Fund because it suspended its dividend.

      


  • Tweedy Browne Funds' Investment Adviser's Letter to Shareholders

    “Interest rates are, of course, prices. They are the prices that set investment hurdle rates and that discount the present value of estimated future cash flows. They are the traffic signals of a market economy.”

      


  • Tweedy Browne Fund 1st Quarter 2016 Commentary

    High equity valuations combined with increasing macroeconomic worries, not the least of which is the sense that monetary largesse may have run its course, continued to roil global equity markets in the first quarter. After a turbulent start to the New Year similar to that faced late last summer, equity markets rather quickly regained their composure to finish the second half of the quarter with a flourish, recouping much of the losses they suffered in the first half of the quarter. With the exception of the Wordwide High Dividend Yield Value Fund, which modestly underperformed its benchmark over the last three months, our remaining three Funds all outperformed their benchmarks in the first quarter, which led to an index beating result, albeit negative, over the last fiscal year in our two global value funds.

      


  • Tweedy Browne Global Value Invests in Bank of New York Mellon

    Tweedy Browne Company LLC, a successor to Tweedy & Co., was first established by Forrest Birchard Tweedy in 1920 as a dealer in closely held and inactively traded securities. The firm’s 96-year history is grounded in undervalued securities, first as a market maker, then as an investor and investment advisor. The firm takes a value investing approach that focuses on long term investments very similar to Joel Greenblatt (Trades, Portfolio), Seth Klarman (Trades, Portfolio) and the founder of value investing Benjamin Graham.


    During the first quarter, the Tweedy Browne (Trades, Portfolio) Global Value Fund purchased 1,315,780 shares of Bank of New York Mellon Corp. (NYSE:BK).

      


  • Tweedy Browne Global Value Buys 5 New Stocks in Q1

    Tweedy Browne (Trades, Portfolio) Global Value, an outperforming value fund founded in 1993, updated its first quarter portfolio changes this week, revealing five new stock purchases.


    Tweedy Browne (Trades, Portfolio) purchased two stocks from Hong Kong, one of its smallest country allocations at fourth quarter end and one stock from Germany, one of its larger country allocations. Managers’ purchase of Bank of New York Mellon Corp. (NYSE:BK), the largest new position, slightly expanded the fund’s weighting in its largest sector, financials. Finally, it purchased Avent Inc., a U.S. computer hardware company.

      


  • Tweedy Browne Global Value Adds Shares of AGCO

    Tweedy Browne Company LLC, a successor to Tweedy & Co., was first established by Forrest Birchard Tweedy in 1920 as a dealer in closely held and inactively traded securities. The firm’s 96-year history is grounded in undervalued securities, first as a market maker, then as an investor and investment advisor. The firm takes an investment approach similar to Benjamin Graham, who personally mentored one of the luckiest and most successful investors of all time, Warren Buffett (Trades, Portfolio).


    In the first quarter of 2016, the Tweedy Browne (Trades, Portfolio) Global Value Fund added 256,998 shares of AGCO Corp. (NYSE:AGCO).

      


  • Tweedy Browne Trims Stakes in Financial Stocks

    Guru investment advisory and fund management firm Tweedy Browne (Trades, Portfolio) neither bought nor sold stakes in the fourth quarter and added to only a handful. Nearly all of its activity involved reductions of stakes in its portfolio.


    Tweedy Browne (Trades, Portfolio) slashed its stake in Torchmark Corp. (NYSE:TMK), a McKinney, Texas-based financial services holding company, by 82% with the sale of 1,139,729 shares for an average price of $58.61 per share. The transaction had a -1.91% impact on Tweedy Browne (Trades, Portfolio)’s portfolio.

      


  • Tweedy Browne Reopens Global Value Fund II

    Re-opening of Tweedy Browne (Trades, Portfolio) Global Value Fund II



    The Tweedy Browne (Trades, Portfolio) Global Value Fund II – Currency Unhedged will reopen to new investors on February 1, 2016. As you will recall, the Fund was closed to new investors back in August of 2014, as it had become difficult to invest new subscriptions in the face of rising equity valuations. More recently, flows have become more manageable, and we now believe that the addition of new assets can be managed effectively, without risk of diluting returns to existing shareholders. This is especially true given the enhanced volatility in global equity markets of late which has begun to stimulate new idea flow.

      


  • Tweedy Browne Fund 4th Quarter Commentary

    The Tweedy, Browne Funds produced modestly positive returns in the 4th quarter of 2015, capping off what was in general a rather difficult year for value investors. Each Fund’s cash reserves, low weightings in Japan and the U.S., oil & gas component, and overall value exposure weighed on relative returns. The spread between the value and growth components of the benchmark indices widened considerably in favor of growth during the year. In fact, the so called “FANG” stocks (Facebook, Amazon, Netflix, and Google), which, in our view, trade at exorbitant multiples of earnings power, accounted for about half the return of the MSCI World Index when measured in local currencies. While this kind of divergence is not at all uncommon in the later stages of a bull market as equity valuations become untethered from underlying intrinsic value, it’s hard to recall a previous period when the so called “smart money” seemed so dumb.


    It is not surprising, as market volatility increased in the second half of the year, that the food, beverage, and tobacco component of our Fund portfolios produced the strongest returns. This included strong results for the quarter in Unilever, Philip Morris International (NYSE:PM), and Heineken, with the latter’s strength largely related to the derivative impact of the proposed InBev/SAB Miller deal on beer company valuations. The healthcare segment of the portfolio also stood out, with solid results in Baxalta (NYSE:BXLT), the spinoff from Baxter, which announced shortly after quarter end that it would be acquired by Shire (NASDAQ:SHPG) at a substantial premium. Its former parent, Baxter International, Johnson & Johnson, GlaxoSmithKline, and Roche also produced very nice returns during the quarter. We also had very solid returns in several of our insurance holdings including SCOR, Zurich Insurance Group and Munich Re.

      


  • Tweedy Browne Global Value Raises Stake Sevenfold

    Tweedy Browne (Trades, Portfolio) Global Value septupled its holding in E-L Financial Corp. Ltd. (TSX:ELF) in the fourth quarter, adding 79,300 shares to its stake.


    Tweedy Browne (Trades, Portfolio) Global Value seeks long-term growth of capital by investing throughout the world in a diversified portfolio consisting primarily of non-U.S. marketable equity securities. Tweedy Browne (Trades, Portfolio) Global Value has a policy of purchasing U.S. securities only when there is an attractive opportunity at hand.

      


  • Tweedy Browne Global Value Adds to Stakes in 4th Quarter

    Nearly all of Tweedy Browne (Trades, Portfolio) Global Value Fund’s fourth-quarter activity involved additions to existing stakes.


    The most noteworthy of those transactions was the Fund’s increase of nearly 721% to its stake in E-L Financial Corp. Ltd. (TSX:ELF), a Toronto-based life insurance and financial services company. The Fund purchased 79,300 shares for an average price of C$688.37 (about $485.95 in U.S. currency) per share. The acquisition had a 0.6% impact on the Fund’s portfolio.

      


  • Tweedy Browne Cuts Alphabet, Union Pacific and Philip Morris

    Tweedy Browne cut many of its stakes below 0.2% in the third quarter. It is an investment partnership owned by its four managing directors – William H. Browne, John D. Spears, Thomas H. Shrager and Robert Q. Wyckoff Jr.


    3M Co. (MMM)

      


  • Tweedy Browne Comments on Standard Chartered Bank

    We have also made an investment (in multiple lot purchases over the last two years) in Standard Chartered Bank (LSE:STAN), a UK-headquartered but largely emerging-market-dependent bank that again in our view was conservatively financed by deposits well in excess of loans, and has, in our opinion, one of the best banking networks across Asia, the Middle East, Africa and other emerging markets. Unlike our other Asian bank holdings, Standard Chartered has incurred above average loan losses and recently replaced senior management and undertaken multiple steps to address what we consider to be “fixable” problems. While this process may, and usually does, take longer than expected, we are optimistic that the bank will be able to get through this difficult period, and ultimately emerge stronger and more profitable. As you can imagine, given the uncertainty around China’s future growth (as evidenced by the recent devaluation of the yuan), these bank investments have not been getting the votes from “Mr. Market” over the near term; however, over the longer term, China and other parts of Asia should, in our opinion, continue to grow at rates in excess of the growth rates found in most of the Western world, and we believe these banks should remain significant beneficiaries of that growth.

    from Tweedy Browne (Trades, Portfolio) Investment Advisers' semi-annual report shareholder letter.  


  • Tweedy Browne Investment Advisers' Semi-Annual Letter to Shareholders

    Slowing growth in China, the world’s second largest economy, coupled with uncertainty surrounding the prospective normalization of interest rates in the United States sent tremors through global equity markets over the last several months. After a rather short lived and furious correction in late August and early September, global equity markets regained their footing and, as we write, have taken back much of the ground they lost as summer came to an end.


    For value investors such as ourselves, it remained business as usual through this turbulence, although we would admit to a certain counterintuitive satisfaction as equity markets began their long overdue retreat. After six and a half years of relatively smooth sailing, setting aside a brief hiccup in 2011, it had become quite a challenging environment for value investors. Bargains had become increasingly scarce and many of our existing holdings were trading at or near our estimates of their intrinsic value – consequently, we were selling and trimming back a number of those positions. As a result, cash reserves had increased and our returns were somewhat diluted while the bull markets and their associated benchmark indices raged on. We were able to take some advantage of the markets’ downside volatility in late summer. However, it did not last long enough, nor was it steep enough, for us to make significant headway in putting our cash reserves to work.

      


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